NMa: lack of price competition in school book market
Price competition in the market for school books is insufficient due to a lack of price incentives. The market structure is such that schools determine which books are required, though pupils and parents pay for costs.
Schools and teachers are not being stimulated to take into consideration the price of schoolbooks when they determine which schoolbooks are required. So concludes the Netherlands Competition Authority (NMa) in a 'scan' of the Dutch market for school books in secondary education. The NMa's findings subscribe to conclusions put forward in reports authorised by the Ministry of Education, Culture and Science, and the Dutch Consumer Association [Consumentenbond].
The NMa takes the view that an increase in price competition may be achieved by changing the structure of the school book market. Those authorised to determine which schoolbooks are required should also be the ones who pay for them. The NMa has informed the Minister of Education Culture and Science and the Minister of Economic Affairs of its research findings, as these can be of use to policy development.
The NMa observes that the abolition of fixed book prices in 2005 has not yet resulted in lower prices. Primarily, this is due to the fact that price incentives have up until now remained unaffected by the change of policy. Previously, educational publishers were already in a position to compete for prices. However, they did alter purchase discounts following the abandonment of fixed trade margins.
The NMa establishes that books are of an increasingly extensive and comprehensive nature, and also feature CD ROMs for instance. Also, a growing number of schools employ external book funds, set up by book shops or book distributors, to provide for a school book lending scheme. These external funds relieve schools from a number of practical, financial and administrative tasks, but generally charge higher prices as compared to book funds set up by schools themselves.
The NMa carried out the market scan in order to gain further insight into the market for school books and give out information on current practices. It announced its intention to look into this particular market in the NMa Agenda 2006, which included the media and communications sector among the areas prioritised. The full text of the scan (in Dutch only) may be found on the NMa website at www.acm.nl.